MUSCAT (Agencies) – Omani police fired rubber bullets on stone-throwing protesters demanding political reform in an industrial town on Sunday, killing two people, and the military moved in to secure the area, witnesses said.

They said at least 1,000 protesters had gathered for a second straight day in a main square in Sohar before police tried to disperse them first with tear gas and batons before firing on them with rubber bullets, Reuters reported.

“Two people have died after police fired rubber bullets in the crowd,” one witness, who declined to be named, told Reuters from Sohar. Another witness said the police had used live ammunition, but that could not be confirmed.

State news agency ONA confirmed that there had been casualties in Sohar, saying that police and anti-riot forces had clashed with demonstrators.

“Police and anti-riot squads confronted this group of wreckers in a bid to protect people and their properties, which caused casualties,” it said.

The police station targeted by the protesters is near Earth Roundabout, where some 250 demonstrators have been holding a sit-in, witnesses told AFP.

The demonstrators have dubbed the intersection “Reform Roundabout,” as they press for change in the Persian Gulf sultanate whose ruler Qaboos has been in power for four decades.

The protesters, who were mostly unemployed have been demanding jobs, better salaries and measures to curb corruption, the witnesses said.

Protests were also taking place in the southern town of Salalah where demonstrators have been camped out since Friday near the office of a provincial governor.

After the clashes in Sohar, police pulled back from the protest and the crowd, some of whom were carrying petrol and matches, was making its way to a police station, said one witness, who gave his name only as Mohammed. Helicopters circled overhead.

For decades the sultanate was an isolated country living on the margins of the modern world, but the 2010 UN Human Development Report released in November said Oman made the most improvement since 1970 out of 135 countries.

Previously, the sultanate had been largely spared the deadly turmoil that has swept the Arab world since the ouster of Tunisian president Zine El Abidine Ben Ali in a popular uprising.

Around 300 Omanis, including women, staged a peaceful rally in central Muscat on February 18 to demand an increase in salaries and political reforms.

But the demonstrators have emphasized their loyalty to the ruler with placards declaring: “We are always loyal to you, Sultan Qaboos.”

That rally was the second of its kind in the sultanate in the past two months, after about 200 demonstrators took to the streets on January 17 in protest against rising prices and corruption.

In an apparent move to calm the demonstrations, Qaboos announced on Saturday an increase in the monthly allowance for students at universities and vocational schools.

The state news agency said the sultan ordered a raise in the allowance of between 25 and 90 Omani rials ($65 to $234) to “achieve further development and... provide a decent living for his people.”

He also ordered the creation of a consumer protection bureau, and was looking into opening cooperatives, ONA said.

Earlier this month, Oman raised the minimum wage for an estimated 150,000 private sector employees from $364 to $520 a month.